Every price hike is in your face, everywhere you go. Higher gas prices do damage, no doubt about it. But the harm isn't just to your wallet. It's also to your state of mind.
"There is a difference between gasoline and other commodities, a different psychology," said Dan Ariely, professor of behavioral economics at Duke University. "If you took away the receipt after someone went grocery shopping, would he be able to tell you what any item cost? But with gas, we stand next to the pump and we watch the cost accumulate."
Economists generally focus on the number of dollars that are siphoned from disposable income, money that won't be spent elsewhere.
But there are broader reasons to worry: If consumers fixate on higher gas prices, they may become convinced that things are worse than they really are. They may become more afraid to spend, more anxious about investments and risks.
That kind of caution means less spending in stores, fewer dinners out and not as many people in the market for new homes. In other words, by being too careful, Americans could slow the economy and make their fears come true.
In Saturday’s newspaper, the AJC took a look at how climbing gasoline prices have changed consumers’ attitudes and – how that can chill the economy.
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